What's the big deal about SCANA leaving downtown?




By Tom Prioreschi, downtown developer

Tom Prioreschi

On the same day that City Council was making its decision regarding the homeless center, SCANA announced what everyone seemed to know and accept for the last several years. It was pulling out of downtown Columbia. But maybe that was OK. Columbia's loss is Cayce's gain and, after all, they are staying in the area. Besides, downtown does not "meet their needs," and they will "get greater worker productivity" from the move, according to the SCANA press release. They owned the land nearby. They wanted an office campus setting, better access, and free parking for employees. They are a corporation that is only responsible to its stockholders, and if that improves the bottom line, more power to them. Right? I say WRONG!!! WRONG!!! WRONG!!!

As a public utility with monopoly powers, SCANA is not like most corporations. They get revenues by having the state regulators approve rates for their services. They obtain prices by having the state approve increases based on fair returns of their employed capital. If their costs go up, they come back and ask to increase the rates. The result is if SCANA decides to spend more money on public relations experts to convince us that what it is doing is a good thing, well then, we customers ultimately pay for those experts.

Any corporation operating under those rules is very different from one where a competitive war is being waged every day. Being a monopoly does not necessarily make SCANA a bad company. On the contrary, they do a lot of good, and they have a lot of wonderful people. However, what it does do is create a special responsibility.

SCANA reaches across the breadth of society. SCANA has a relative abundance of discretionary resources and dollars. It is endowed with a level of social responsibility, one that sees clearly when society benefits from economic prosperity, the company also benefits.

Columbia provides a greater-than-proportional share of the social services for the Midlands. So by moving out of Columbia and reducing Columbia's sources of funds, SCANA is reducing the funds available to the local civic entity that already is stretched to meet its social service commitments. This is a lack of social responsibility. Instead of helping the civic entity that most needs its help, SCANA is pulling out and hurting it.

How enlightened is it to produce huge amounts of office space, expending society's resources to do so (and charging society for it), when you are emptying out office space that sits idle? How environmentally enlightened is it to build a huge complex, utilizing resources, paving a large area near a river, forcing the creation of new surrounding infrastructure and having your employees get in their cars to drive to lunch instead of walking? These actions point to SCANA coming up way short on social responsibility.

What about SCANA's claim that the site will "increase worker productivity"? If that's true, wouldn't the reduced rates from their lower cost structure be a benefit to society?

Maybe lower costs are not in the cards for SCANA, nor are lower rates for us. Let's look at how SCANA can justify building a huge new complex with a huge capital outlay versus continuing to rent space without any capital expenditure? What if it increases its capital outlays and then has to pass a rate increase onto the public since it's no longer getting a fair return on it's increased employed capital?

Are the carrying costs of the new capital and the moving costs justified by the savings compared to the current rent? Are we entitled to that analysis since it will affect our future rates? SCANA released a letter telling downtown Columbians how SCANA would do whatever is necessary to help in the transition after emptying out a 450,000-square-foot build ing.

Let's assume they have shown a savings somewhere. So the "savings" is compared to what baseline? How did SCANA set a baseline for comparison for site "A'' vs. site "B" vs. site "C"? Did they look at every site within the city that was presented for review and say, "Well we must receive this incentive to stay or we must be able to achieve this rent level?"

They seemed to have no difficulty pulling an Art Modell. (Art Modell was the owner of the Cleveland Browns who was carrying on secret negotiations with the City of Baltimore while he pretended to be negotiating with Cleveland before he moved the team to Baltimore.)

Nor did they have a problem secretly negotiating with Cayce and Lexington County to get the terms they wanted, so why not good-faith negotiations with Columbia and Richland County? Why were there no serious negotiations with the University about Innovista? Is it because an energy company is not interested in (hydrogen fuel cell) energy?

Why didn't they seriously consider the Bull Street site which would also have had a low-rise campus, great access, and free parking for its employees? That one is such a mystery, or is it? If the savings come from the land which they own, why not sell the land, generate capital and reduce the invested capital base so rates could be lowered?

Could it be that SCANA never considered staying in Columbia in the first place? Could it be that SCANA's CEO, who lives in Charlotte, might not care enough about Columbia? Did their board of directors ask these questions? Does SCANA's board care about social responsibility? Do SCANA's employees care what their employer does? Will the state regulators ask these questions? Are we entitled to these answers before we are impacted? What is our recourse?

Editor's note: Since 2000, developer Tom Prioeschi has had more than $50 million in development downtown to include the apartment conversion of the Barringer Building, the condominiums at 1520 Main, and the 110 luxury units called Vsion at 1321 Lady Street.